Magistrate Judge Sarah Netburn has set a timeline for the ongoing legal battle between Ripple Labs and the SEC. Ripple has contested the SEC’s request for significant civil penalties, arguing that the allegations lack sufficient evidence. The trial has garnered attention from the cryptocurrency community.
In a recent development, Judge Netburn has established a schedule for the lawsuit between Ripple Labs and the SEC, as reported by Crypto News Flash. This timeline is crucial for Ripple’s attempt to dismiss the SEC’s latest expert evidence. Judge Netburn has granted the SEC an extension until April 29, 2024, to file their counterarguments, and Ripple will have three business days to respond.
Despite recently being appointed as District Judge in the Southern District of New York, Judge Netburn continues to preside over the Ripple vs. SEC case. Known for her impartial decisions, Judge Netburn has been positively received by the crypto community. In 2021, she expressed her understanding that XRP has both currency value and utility, setting it apart from bitcoin and ether.
Ripple is challenging the SEC’s request for substantial civil penalties, arguing that the allegations lack adequate evidence. The company proposes a maximum penalty of $10 million, countering the SEC’s demand for a hefty fine. Ripple asserts that its On-Demand Liquidity transactions, which facilitate cross-border payments, are distinct from traditional investments and should not be subject to the same regulatory scrutiny.
Ripple also addresses the lack of evidence supporting future violations or reckless behavior in its institutional XRP sales, further strengthening its defense. Bill Morgan, Ripple’s representative, argues that ODL sales should not be considered investment contracts and emphasizes that customers use XRP for its utility in cross-border transactions. Despite the challenges, XRP supporters remain optimistic for a settlement, anticipating a potential increase in the cryptocurrency’s price after resolution.
Legal expert Jeremy Hogan predicts that the lawsuit could conclude by the summer, speculating a potential settlement of $100 million. Hogan suggests that the judge may not order disgorgement but impose a $100 million penalty on Ripple as a compromise for the SEC.
Previously, the SEC demanded a $2 billion fine from Ripple for alleged violations in XRP sales. However, Ripple argues that XRP should not be classified as a security and falls outside the SEC’s regulatory scope. Ripple’s chief legal officer, Stuart Alderoty, presents several reasons why the penalty should not exceed $10 million, highlighting the lack of evidence of financial harm.
The SEC’s reply brief, due by May 6, will further shape market expectations. A strong response from the SEC could increase anticipation of punitive measures against Ripple, potentially impacting the value of XRP. Currently, XRP is trading at $0.503 with a 24-hour decline of 3%.